Náisiúnta Leictreach Contraitheoir Eireann v The Labour Court

• Jurisdiction: Ireland
• Judge: Mr. Justice Garrett Simons
• Judgment Date: 23 June 2020
• Neutral Citation: [2020] IEHC 303
• Docket Number: 2019 No. 280 J.R.
• Court: High Court
• Date: 23 June 2020

BETWEEN

NÁISIÚNTA LEICTREACH CONTRAITHEOIR EIREANN

CUIDEACHTA FAOI THEORAINN RATHAIOCHTA

APPLICANT

AND

THE LABOUR COURT

THE MINISTER FOR BUSINESS ENTERPRISE AND INNOVATION

IRELAND

THE ATTORNEY GENERAL

RESPONDENTS

[2020] IEHC 303

Garrett Simons

2019 No. 280 J.R.

THE HIGH COURT

JUDICIAL REVIEW

JUDGMENT of Mr. Justice Garrett Simons delivered electronically on 23 June 2020

INTRODUCTION

1 These proceedings concern the validity of secondary legislation which purports to regulate the remuneration of electricians working in the construction industry. The impugned legislation prescribes (i) minimum rates of remuneration; (ii) the requirements for a pension scheme (including a minimum daily rate of contribution to the scheme by an employee and an employer respectively); and (iii) the requirements for a sick pay scheme.

2 The impugned legislation takes the form of a sectoral employment order made pursuant to the Industrial Relations (Amendment) Act 2015. The defining characteristic of a sectoral employment order is that all employers within the economic sector concerned are required to apply the prescribed terms and conditions to their employees. These prescribed terms and conditions take effect in substitution for any less favourable terms in existing contracts of employment. This represents a significant encroachment on the employers' freedom to contract.

3 Any contravention by an employer of the terms and conditions prescribed under a sectoral employment order can be the subject of a complaint to an adjudication officer, and, on appeal, to the Labour Court. The failure to comply with a determination on a complaint can be enforced by way of an application to the District Court. It is a criminal offence for an employer to fail to comply with an order of the District Court directing them to pay compensation to an employee. In principle, therefore, an employer who employs an electrician at a rate of pay less than that prescribed, or who fails to make the prescribed contribution to a pension scheme, may ultimately find themselves subject to criminal prosecution.

4 The applicant is a company limited by guarantee which claims to represent a number of small to medium sized employers who provide electrical contracting services. The precise number of paid-up employer-members of the company appears to have fluctuated over the course of the proceedings, but it is accepted by the respondents that the company has a “sufficient interest” to pursue certain grounds of challenge. (It is not accepted, however, that the company would have standing to pursue arguments based on the property rights of its individual members).

5 As noted above, the secondary legislation has been made pursuant to the Industrial Relations (Amendment) Act 2015. This legislation had been introduced in the aftermath of the judgment of the Supreme Court in McGowan v. Labour Court [2013] IESC 21; [2013] 3 I.R. 718. This judgment held that the provision made for “registered employment agreements” under Part III of the Industrial Relations Act 1946 was invalid having regard to the provisions of Article 15.2.1° of the Constitution. One of the principal issues for determination in the within proceedings is whether the revised legislative scheme introduced under the 2015 Act has avoided all of the pitfalls identified in the previous legislation.

NOMENCLATURE

6 The process which culminated in the making of the sectoral employment order impugned in these proceedings had commenced with the submission of certain applications to the Labour Court. These applications were submitted by a trade union and two employers' organisations. The shorthand “ the joint applicants” will be used to refer to these parties.

7 The applicant for judicial review had participated in the statutory process as an interested party and had objected to the proposal to make a sectoral employment order. To avoid any confusion in the use of the term “applicant” as between the joint applicants and the applicant for judicial review, the shorthand “the objecting party” will be used to refer to the applicant for judicial review.

8 The impugned secondary or delegated legislation, i.e. the sectoral employment order, will be referred to as “the impugned order” or “ the electrical contracting order” where convenient.

9 The shorthand “the Minister” will be used to refer to the Minister for Business Enterprise and Innovation.

10 Unless otherwise stated, all references to a “section” of legislation and to “Chapter 3” should be understood as referring to the Industrial Relations (Amendment) Act 2015.

STRUCTURE OF THIS JUDGMENT

11 The case for saying that the impugned order is invalid has been advanced on a number of different fronts. The objecting party's ultimate ambition is, however, to have the relevant provisions of the parent legislation, namely Chapter 3 of the Industrial Relations (Amendment) Act 2015, declared to be invalid having regard to the provisions of Article 15.2.1° of the Constitution. As explained presently, both parties to the proceedings have invited the High Court to determine this constitutional issue, notwithstanding that the principle of judicial self-restraint dictates that a court should generally avoid ruling on the validity of legislation unless it is unavoidably necessary to do so in order to resolve the proceedings before it. (See paragraph 104 et seq. below).

12 The balance of this judgment is divided into four parts as follows. The legislative framework and factual background will be explained in Part I. The non-constitutional grounds of challenge will be addressed in Part II. The constitutional challenge will then be addressed in Part III. Finally, a summary of conclusions will be set out in Part IV.

PART I

LEGISLATIVE FRAMEWORK

13 The procedure to be followed in making a sectoral employment order is prescribed under Chapter 3 of the Industrial Relations (Amendment) Act 2015. The procedure can be analysed as involving a number of overlapping stages as follows.

(i). Application for an examination

14 The first stage entails the submission of an application to the Labour Court requesting it to examine the terms and conditions of employment “in the economic sector in respect of which the request is expressed to apply” (section 14). An “economic sector” is defined as meaning a sector of the economy concerned with a specific economic activity requiring specific qualifications, skills or knowledge. As discussed presently, one of the issues to be determined in this judgment is whether the Labour Court is entitled to amend the scope of the economic sector from that set out in the application.

15 An application may only be submitted by (a) a trade union of workers, (b) a trade union or an organisation of employers, or (c) a trade union of workers jointly with a trade union or an organisation of employers. The applicant(s) must be “substantially representative” of either (i) the workers, or (ii) the employers of workers, of the particular class, type or group in the economic sector in respect of which the request is expressed to apply.

(ii). Examination by the Labour Court

16 The second stage entails an “examination” by the Labour Court of the terms and conditions of employment in the economic sector. It is a condition precedent to its embarking upon an examination that the Labour Court be satisfied that the applicant is “substantially representative” of the workers of the particular class, type or group in the economic sector. This assessment is to be carried out by reference to the documentation submitted as part of the application. The objecting party complains that this implies that the Labour Court must determine whether the “substantially representative” criteria has been satisfied in advance of any consultation with interested parties. This is said to be an unfair procedure.

17 It appears from the structure of section 14 that once the Labour Court is satisfied of the threshold issues under subsection (1), it then proceeds to undertake an examination of the economic sector concerned. The Labour Court must publish notice of its intention to undertake an examination, must invite representations from interested parties, and may hold an oral hearing. On the facts of the present case, an oral hearing had been held on 14 March 2019.

18 The section is oddly structured in that whereas express provision is made in respect of procedural matters, there is no guidance as to the substance of the examination.

(iii). Recommendation to the Minister

19 In the event that the Labour Court considers it appropriate to do so, it may make a recommendation to the Minister that a sectoral employment order should be made. This represents the third stage of the process. The Labour Court is precluded, by section 16(4), from making a recommendation unless it is satisfied that to do so—

(a) would promote harmonious relations between workers and employers and assist in the avoidance of industrial unrest in the economic sector concerned, and

(b) is reasonably necessary to—

(i) promote and preserve high standards of training and qualification, and

(ii) ensure fair and sustainable rates of remuneration, in the economic sector concerned.

20 In reaching its decision on whether to make a recommendation, the Labour Court must hear all parties appearing to the Labour Court to be interested and desiring to be heard, and must have regard to their submissions. The Labour Court must also have regard to the following matters:

(a) the potential impact on levels of employment and unemployment in the identified economic sector concerned;

(b) the terms of any relevant national agreement relating to pay and conditions for the time being in existence;

(c) the potential impact on competitiveness in the economic sector concerned;

(d) the general level of remuneration in other economic sectors in which workers of the same class, type...